"Simply being reactive when offering renminbi products to clients is not enough"
Agnes Vargas, regional head, Greater China & ASEAN, Commerzbank explains how formulating a Rmb strategy is critical for banks trying to capitalise on the currency’s burgeoning popularity. November 07, 2013 | Agnes VargasTransformation of the renminbi in recent years has rendered the Chinese currency almost unrecognisable since its internationalisation in 2009. Having now advanced to eighth place in the world’s most traded currencies (climbing from 20th, 17th and 11th places in 2007, 2010 and 2012 respectively), it seems likely that the renminbi will become a top three trading currency as early as 2015. Despite this evolution, the Chinese government continues to restrict how the currency is used – an omnipresence that arrests its progress as a truly global currency. While its future as a world currency (along with the US dollar and the Euro) seems certain, its role as a reserve currency will be postponed until the Chinese state releases its grip on the use, exchange and transferability of the renminbi. In this respect, the early signs are positive. Already, the renminbi has become convertible under the current account – making it a trading currency. The borders of mainland China have become more porous with regards to cross-border capital account transactions. Indeed, there seems little doubt that the renminbi is set to impact global transactions on a major scale meaning that it is vital that financial institutions (FIs) position themselves, not just for the end result, but to leverage on each development as it is announced. With new regulations and updates being introduced in rapid succession, having a renminbi strategy is crucial for optimising the potential benefits of this rapidly evolving market. What is more, such a strategy will need to incorporate all aspects of the currency – including trade settlement, supply chain management and advisory services. A trading currency in progress Information will be a critical part of developing such a strategy, with focus on both where we are today and where we are going in the future. Recent daily renminbi trading surged to $120 billion from $34 billion in 2010, according to t... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Cash, Treasury & Trade, China, Rmb, Transaction Bankingcash,China,Rmb,Transaction Banking, Cash, Treasury & Trade,China,Rmb,Transaction Banking, Keywords:Agnes Vargas, Marcus Lenz, Commerzbank, BIS, SWIFT, SCRCP Agnes Vargas, Marcus Lenz, Commerzbank, BIS, SWIFT, SCRCP
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